Uncovering DTC Innovation and Marketplace Trends in Consumer Goods
Though e-commerce maturity varies across the consumer goods industry, selling direct-to-consumer has, at this point, muscled its way into a place of universal interest. Whether it’s because of the increased revenue opportunities or the wealth of consumer data it can deliver (or both), today’s CPGs view the channel as a prime opportunity for innovation.
But how are companies defining what DTC innovation looks like, and what are some of the ways they're seizing these new opportunities? Read on to learn how companies are leveraging technology to create a differentiated customer experience, where online marketplaces are playing a role, and where social commerce fits into all of this.
In a recent Fireside Chat with Lisa Johnston, senior editor at CGT, Phani Solomou, VP of connected commerce at Genpact, broke down some of the biggest challenges surrounding DTC into three main buckets. The first bucket, which explores why CPGs are struggling to get the leadership attention e-commerce deserves, identifies the lack of internal education when it comes to determining the value-added service a company provides to consumers by going DTC. CPGs must determine not only what’s in it for the consumer, but also what’s in it for the organization: Is it to drive growth? Is it serving as a testing ground? Is it to gather consumer data to drive profitability in the future?
The second bucket contains the challenges of what to do once this value has been determined. The different models of selling DTC — whether it’s selling directly to consumers from a brand’s e-commerce site or through an online marketplace — each carry a host of new logistical, relational, and technological challenges.
Finally, the third bucket contains the trials of how to best organize your teams to set yourself up for success. Much of this requires cross-functional collaboration, Solomou noted, and this new way of operating can often mean developing models that are balanced between global and local teams — while driving collaboration across the board.
Also joining the conversation was Phillip Jackson, VP of commerce at Rightpoint – a Genpact company, the customer experience arm of Genpact, where he dove into some of the ways CPGs are innovating when it comes selling direct-to-consumer today. As a key component of this discussion, he pointed out that innovation is defined differently by every business, with this meaning shifting based on not only the state of their e-commerce maturity, but also the size of the enterprise and just what they’re selling.
A global CPG just testing direct-to-consumer for the first time might be focused on learning how to merchandise and invest in SKU or channel differentiation, while a company with a house of brands may be more focused on investing in their marketing channels to measure attribution and leverage investments in the most valuable area.
For these companies, the DTC innovation may become less about the actual channel investment and performance marketing of growing DTC itself, and instead about taking a longer term view on growing retention across the brand — as well as measuring loyalty — in every place the customer happens to be.
Watch the full video to learn more about direct-to-consumer innovation in the consumer goods industry, including a number of best practices for companies that still have a lot of heavy lifting to do on their journey.
